Franchising | November 2012 | By Robert Thomas

Rags to Riches

Smoothie King franchisee Rose Kuhnau lays out her strategy on how to turn a struggling unit into one of the brand’s best.

Rose Kuhnau turned around Smoothie King sales in New Orleans.
Smoothie King franchisee Rose Kuhnau says turning around a weak unit takes an all-hands-on-deck approach. Smoothie King
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After working for more than 12 years in multiple departments of the Smoothie King corporate office, Rose Kuhnau made her franchising debut in 2000, purchasing her first Smoothie King unit in New Orleans.

Today, Kuhnau owns four units in the Big Easy’s metropolitan area, helping to grow a brand that was started by her father. She was recently named one of the “Most Improved Franchisees” after transforming one unit and increasing sales by $250,000 in its first year.

Kuhnau offers advice on how to transform a down-on-its-luck unit into one of the system’s highest performers.

1. Be an important piece in the brand’s puzzle

Having worked in the corporate office for the brand, I was able to see how the franchisee is just one piece of a whole for the entire concept. If one piece is operating at a substandard level, it affects the whole brand, and not just that particular unit.

When I purchased the unit that merited the “Most Improved” award, it had already seen three different operators in a 10-year span, and the most recent owner wasn’t doing anything to reinvest in the actual unit. There was an overall lack of general maintenance, the quality of the product was suffering, and the store was understaffed, which inevitably led to poor service. It’s no secret that this industry is founded in service, and when a customer walks into a store, they can feel if they’re wanted or not.

From the physical plant to the tone of voice used by employees, franchisees need to recognize their role in the overall mission of the brand. When you boil it down to this fundamental basic, there’s no reason why units under your ownership or management won’t be successful and stay profitable. As a franchisee, you need to continually reinvest in your business.

2. Fix it all, and all at once

If you’re going into a situation that’s in need of a fix, it’s better not to focus on one particular aspect; rather, improve them all at the same time, giving the same amount of attention to each. From my experience, there is no single elemental aspect of the business that will help you achieve success quickly. You have to do everything in a multi-tiered approach. Everything needs to be immediately operating at a higher level.

In my particular case, I needed to get the store back to a look I would be satisfied with as a customer. This goes back to having the perspective of your customer. With this mindset, I saw the space as unwelcoming and ripped it all out. I wanted to create a new front to the store and create an environment that could match the quality of product I would be serving. This is an important aspect, as well; if your goal is to have customers come in and spend their money on your product, your space needs to be reflective of that product.

However, every aspect of a struggling unit needs your attention. I also had to bring in new staff and ensure that it was trained properly and the store would be staffed appropriately to deliver exceptional service. Additionally, a new marketing strategy was laid out, and communication of the brand’s vision and emphasis on quality was established.

3. Experience the other side of the counter

The reason units get this way is because some franchisees don’t reinvest in the business. They come into work through the back door and go straight into their office. Continually experience your business from your customer’s perspective. After you’ve fixed those problems, then you can address your operational issues, and an important one is the staff.

These are individuals you’ve entrusted to provide the service and product to help you sustain a profitable business. They need to be on the same page and have the same goal objectives. Lay out the vision for them that you have for your business and the brand, and it will work for you. It almost sounds too simple, but some operators don’t have this mentality and business suffers because of it. Be good to the brand and it will be good to you. Some operators look at it as a big down payment for a unit and an even bigger payday afterward, without any work. Keep on all aspects of the business to ensure consistency.

It’s also a good idea to look at the competition during this time and still have that customer point of view. What are they doing differently? Are their angles successful? Is there a way I could do this better? You don’t want to be skimping out on extra business potential because you’re not seeing what else is happening around you.

4. Save money and operate efficiently

While continuing to have the customer’s point of view, you have to focus on operations more as things improve. I’ll have weekly meetings with my managers. During that time, they have to provide me with their weekly cost of goods and labor percentages. We also compare the theoretical to the actual and review anything else that is controllable by them.

As a franchisee, most of the product comes from proprietary items that are purchased from the corporate office. Additionally, the corporate office is supplying the negotiations for the prices of those items, so find money-saving opportunities elsewhere. Again, you need to consistently look into the business as an operator and not expect money to just roll in the door. Can you lower your phone bill? What are other landscaping businesses charging? What’s my retention rate? There are so many factors that can assist you in running sound operations and saving money as a result.

Do you have tips you'd like to share with other franchisees? E-mail them to FranForum@qsrmagazine.com.